A Tale of Two Leans

by BILL WADDELL

There was about as good an article on lean in USA Today the other day as you will ever find in the popular media, describing a lot of good things happening on the factory floors at Sealy, Marlin Steel Wire, Dana, Carlisle Tire and ConMed.  The folks there are racking up all of the typical lean improvements - labor costs down, floor space saved, quality improved - all the things the lean community has been promising for a long time.

The gist of the article is that these companies have been dabbling with lean for a while, but when the economy cratered they got serious. "While a growing number of companies have adopted the practices through the years, the number of converts has grown substantially during the economic downturn," said a guy from Manufacturer's Alliance.  I have to wonder whether much of it is going to sustain once the economy comes back if the commitment to lean was driven by the need to immediately put out  fire that was burning out of control, rather than a genuine understanding that lean is a better way to manage the business. 

You never know who these folks really are and whether they really speak with authority, but the article said,  "Driving the lean movement is an urgent need to pare inventory, executives say. With revenue down and tight-fisted banks reluctant to lend, the makers no longer can afford to tie up hundreds of millions of dollars in raw materials that languish in factories for weeks or months."  If that's the case the likelihood of any of these companies becoming sustaining lean enterprises is pretty slim.  'The banks won't finance our waste any more so I guess we have to do this lean stuff' is hardly the sort of leadership required for excellence.

You never know, however.  It sounds like Marlin Steel Wire is the real deal.  They are a privately held company which ratchets up the probability of their management making sane decisions by orders of magnitude.  Their focus is on teamwork, quality, flexibility and hammering down lead times - all the right objectives.  See is they take the next step and structure themselves into true value streams, take on lean accounting and really become a lean enterprise and not just a lean manufacturer.  That will tell the tale of sustainability.

Lantech seems to be an excellent case in point.  They have done all of the factory stuff and the fluffy,cultural side of lean, but have a sustainability challenge.  They have all the characteristics of a company that is committed to lean, but has yet to realize that lean is first and foremost about management - not factory floor practices or culture.  With their passion for lean, however, odds are they will take the next big step.

Some of the others mentioned, such as Dana and Carlisle Tire, don't really have much hope.  They are tied to the automotive industry which begs the question, What took you so long?  Their copies of The Machine That Changed The World must have got lost in the mail twenty years ago.  Their lean effort seems to be aimed squarely at headcount reduction, which means that, now that their copy of the lean book arrived, they didn't understand it.

Sealy - the star of the story - is going to face some challenges.  They started their lean journey as a privately held company, then went public and they now have to answer to Wall Street.  It will be interesting to see how they weather the insatiable, anti-lean pressure.

I suppose stories like this one help the lean cause more than they hurt. The publicity is generally favorable, but when companies like Dana and Carlisle fail - and the odds are overwhelming that they will - it will feed ammunition to the the manufacturing naysayers.

The moral of the story is that there is lean ... and there is lean.  The same old story applies.  Some companies look lean and a few others truly are lean.  Of course the writer for USA Today cannot be faulted for not knowing the difference, but it is very important for manufacturing management to know the difference between what is going on at places like Marlin and Lantech, and what is passing for lean at Dana.

Comments

[Danie Vermeulen]

Thanks Bill
For sure there will be some short term lean "window dressing" going on as a result of the economic pressures ... unfortunately it has become the flavour of the month for some.
Like you I expect most of these superficially lean organisations to fall off the lean wagon when the "good times" return and banks and customers won't mind to fund the cost of non-value adding processes, excessive inventory, bloated supply chains, etc.
I look forward to seeing those real lean organisations prosper and enjoy the competitive rewards when the good times return.
Let's hope that at least a few of the superficially lean organisations will catch a glimpse of what is possible and that it will put them on the road to pursue sustainable, never-ending real lean transformation ...

Danie Vermeulen
CEO - Kaizen Institute NZ

[William Pietri]

I spend a lot of time helping companies adopt Agile Software Development methods, which seem to have a lot in common with Lean. I don't know how it works in your line of work, but for me the clients who have done the best are the ones who have had some painful problem that forces them to look for a new way of doing things. So I see some cause for hope here.

In thinking about how well these companies will stick with Lean, I wonder two things:

1) Do they see the change as a lasting improvement, rather than purely a response to circumstance? E.g., apparently Americans recycled a lot during WWII, but dropped the habit after, when the cost of waste went down. The current adoption of recycling strikes me as much more robust, though.

2) Are they likely to perceive pain after taking incremental steps away from Lean techniques? With software, for example, if a team that is used to releasing weekly starts dropping back to every 2-4 weeks, things feel sluggish, and many previously easy actions get annoying and difficult.